HONG KONG, Oct 17 (Reuters) - Hong Kong and China shares
crept higher early on Thursday after U.S. legislators reached a
deal to raise the government's borrowing limit, but turnover
stayed muted, suggesting investors did not return to the market
in a big way.

Chinese banks limited benchmark gains in Hong Kong ahead of
more economic data on Friday and after Everbright Bank
became the latest in the sector to announce plans to
tap offshore markets to meet capital adequacy requirements.

At midday, the CSI300 of the leading Shanghai and
Shenzhen A-share listings was up 0.4 percent, while the Shanghai
Composite Index climbed 0.5 percent.

Both closed on Wednesday at their lowest in more than a
week. Shanghai's midday volume on Thursday was near the lowest
this month.

The Hang Seng Index was up 0.2 percent at 23,281.7
points. The China Enterprises Index of the top Chinese
listings in Hong Kong gained 0.3 percent, struggling for a
fourth day at its 200-day moving average, a key technical level.

"Things just haven't looked quite right about the market
since yesterday," said Alex Wong, Ample Finance's director of
asset management.

"People seem to have discounted the U.S. deal because it was
always expected, they look instead quite tentative about China
data tomorrow and are preparing for a correction of sorts," Wong
added.

On Friday, Beijing is due to release another batch of
September economic data and the country's third-quarter GDP
growth figure.

China's annual economic growth is forecast to have quickened
in the quarter after slowing through the first half of the year,
but the pick-up is expected to be short-lived as the government
pushes on with its reform agenda.

On Thursday, shoe-retailer Daphne International
added to unease, tanking 6.3 percent after the China-focused
company posted an 18 percent annual decline in same-store sales
in the third quarter and said predicting how this quarter will
go is hard.

However, sporting retail counters showed strength in spite
of the patchy outlook for China retailers.

Li Ning surged nearly 12 percent after Goldman
Sachs upgraded it from "neutral" to "buy," suggesting the
company's turn-around efforts over the last 18 months will soon
bear fruit.

The Chinese commerce ministry said on Thursday that domestic
consumption is likely to recover in the fourth quarter, but
warned of slow external demand from emerging markets that could
post a challenge to the country's trade.

Data on Thursday showed the world's second-largest economy
drew $8.4 billion in foreign direct investment in September, up
4.9 percent from a year earlier.

Chinese lenders, often seen as proxy for economic growth in
the mainland, underperformed in Hong Kong. China Minsheng Bank
, which closed on Tuesday at its highest since Sept.
25, fell 0.8 percent.

Everbright Bank announced plans to push ahead with a third
attempt in as many years at listing in Hong Kong, a move that
created some unease that more Chinese mid- and small-sized
commercial lenders will seek to raise funds.

In Shanghai, shares of Everbright Bank rebounded 0.7 percent
after closing on Wednesday at their lowest since Sept 26.

There were also gains for Chinese coal counters, buoyed by
short covering in Hong Kong after local media reported domestic
coal prices rose for the first time since November 2012. China
Coal Energy spiked 5.7 percent in Hong Kong
and 3.4 percent in Shanghai.

Zhuzhou CSR Times Electric climbed 4.6 percent
after Malaysian media reported the company is expected to win a
maintenance contract from Malaysia's railway operator.